Review "Herd Behavior", then answer the following question.
CCR. RI. 3
Which statement best describes the relationship between the stock market and herd behavior?
Stock market employees work in a constant state of anxiety, much like herding
animals.
Both herd behavior and the stock market are motivated mainly by greed, which

Question

11-10-2019
English

contestada

Review "Herd Behavior", then answer the following question.
CCR. RI. 3
Which statement best describes the relationship between the stock market and herd behavior?
Stock market employees work in a constant state of anxiety, much like herding
animals.
Both herd behavior and the stock market are motivated mainly by greed, which

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chaplinway chaplinway · Answer 1 · 2020-01-02T03:40:20+01:00

Answer:

The statement that best describes the relationship between the stock market and herd behavior is "Herd behavior contributes to stock market surges and crashes because it compels stockbrokers to act on emotion rather than reason."

Explanation:

The article "Herd Behaviour " by CommonLit Staff explains the concept of mass reaction to situations of fear or survival in humans as we can also see it in animals, modern society sees this effect in the prices of the products and services and that's one of the situations that experience the so-called Herd behavior that affects directly the economic process of selling and buying goods.

sohail09753 sohail09753 · Answer 2 · 2021-10-26T08:38:55+02:00

The relationship between the stock market and herd behavior can be understood by the following statement:

Option B: "Herd behavior contributes to stock market surges and crashes because it compels stockbrokers to act on emotion rather than reason".

CommonLit Staff the author of the article "Herd Behavior" explains the concept of the mass reaction as per the situations such as fear or survival in the humans. These reactions are also seen in animals, the citizen of modern society reacting towards the price variation of products and various services. This situation is only compared to the stock market process that is for buying and selling of stocks as per the price changes.

Reasons for incorrect options:

There is no relationship between the state of anxiety in the employee of the stock market and the herd behavior of animals.
Although both the stock market and herd behavior are motivated by greed, it is incorrect for the stock market, it is majorly motivated by the herd behavior.
The stock market bubbles do not crash due to herd behavior, rather they crash due to the change in the economy.

Therefore, the statement best describes the relationship of the stock market and herd behavior is the surges and crashes which are due to the emotions of stockbrokers rather than reasons.

To know more about article herd behavior, please refer to the link:

https://brainly.com/question/15112922